Thursday, 25 August 2011

THE peak union body is demanding that Julia Gillard's government quarantine billions of dollars of her clean energy program to help local manufacturers. The ACTU wants the government to introduce local content policies, to be set by cabinet, on certain projects able to tap government grants and finance under the government's carbon tax package.

But the policy, which if adopted could prove a blow to companies that have invested here such as Denmark's Vestas and Spain's Acciona Energy, is opposed by overseas clean energy investors. The ACTU is insisting that the policy be applied to the $1.2 billion clean technology program, which will give grants for research into low-pollution technologies and energy-efficient manufacturing.

It also wants it applied to the $10bn Clean Energy Finance Corporation, which will provide loans and equity investments in renewables such as geothermal and other clean energy technologies. ACTU president Ged Kearney said investments in local jobs and industries were an "important part" of the carbon pricing move. "Australian industries are innovative and have the initiative to drive investment in clean energy technologies. We just need to ensure that all Australian businesses are given an opportunity to be apart of this process". she said.

A spokesman for Climate Change Minister Greg Combet said it was premature to comment on this call as legislation and guidelines for the programs had not been finalised. Last night, Minister for Innovation, Industry, Science and Research Kim Carr said the government's position was to have Australian industry programs for project tenders worth more than $20 million and it was developing "specific guidelines for green technology programs". "There will be consultation on the guidelines in the coming months", Senator Carr said.

The ACTU has also criticised the $1.5bn solar flagships program for not including plans for local industry on the grounds that the program involved grants rather than tenders. Investors in the Moree solar farm, which is receiving money under this program, include Fotowatio Renewable Ventures and BP Solar both of which are based in Madrid and Australia's Pacific Hydro.

But last night, Vestas said it was opposed to local content requirements. "Such policies decrease competition, inhibit innovation, reduce economies of scale, and raise costs", said Vestas Australian Wind Technology director of policy and government relations, Ken McAlpine.

"We believe that governments would be able to attract more participation from wind power companies in their respective countries by shifting the focus from local content requirements to building local capabilities, a sound investment climate and competitiveness". Clean Energy Council director Kane Thornton said local content rules were not necessary and Australia was lagging behind China, Germany and Denmark in solar panels and wind turbines as a result of past industry policy.

Debate over climate change policy is not helped by static from ignorant know-alls who publicly invent "facts" they have not checked. An example is John McKerral (Letters, August 13), who declares that the US Energy Information Administration has shown that power from solar thermal plants costs almost six times as much as coal-fired power.

He cites no reference for this claim, which can be disproved simply by reading the EIA's 2011 Annual Energy Outlook (www.eia.gov/aeo). The EIA estimates the capital cost of the cheapest and dirtiest coal-fired plants (without carbon capture or IGCC gasification technology) at $US2844 per kW, compared to $US4692/ kW for solar thermal plants: a gap of 65%.

John McKerral and Brian Hatch frequently make claims in your letters columns that are simply wrong. Hatch claimed (Letters, August 11) that the world stopped warming in 1998. To the contrary, there is a very extensive interlocking chain of evidence for global warming, and its very serious potential consequences, from climatology, meteorology, oceanography, physics, chemistry, botany, zoology, ecology, palaeontology, glaciology and other fields of science.

McKerral previously claimed that deep CO₂ emission cuts will destroy our lifestyle, and that renewable energy can't contribute effectively (Letters, September 3, 2010). This time (Letters, August 12) he confuses energy ( kW/h) and power ( kW) in his claim that solar thermal costs 24¢ per kW. Large-scale solar costs 15-18¢ per kW/h in good locations, and that is declining rapidly. Solar is closing in on the price of electricity from coal, once a carbon price is factored in.

Deployment of photovoltaics in Australia has risen from 10 MW in 2007 to 360 MW in 2010. Far larger deployment of solar has taken place in Europe. Including a carbon price, the levelised cost of solar electricity from building roofs is now cheaper than retail tariffs in NSW, the Northern Territory, Queensland, South Australia and Western Australia (8% discount rate). Its likely that five billion people in temperate regions of the world will have solar parity with retail tariffs by 2015, and with wholesale prices a little later.

RISING electricity prices and a new awareness of ways to cut use have slashed consumer demand. Ausgrid energy efficiency specialist Paul Myors said: "We have seen consumption falling by around 2% a year for average household electricity use over the past four years. That goes against the long-term trend of a steady rise. "It could be the global financial crisis and rising tariffs is a factor. We are seeing the impact of energy efficiency", he said, pointing to the move away from electric hot water systems, previously the main user of electricity in the home.

The fall is expected to lead the national electricity market body, the Australian Electricity Market Operator, to forecast an overall decline of 5 to 6% in demand in the next decade the first drop in living memory. Prices rose as much as 13% on July 1 to fund $14.4 billion of spending on the electricity system but there has been criticism that NSW government owned companies such as Ausgrid and Endeavour Energy have been investing unnecessarily in their networks.

Household electricity prices are to rise by up to 17% more from mid-next year and up to 25% a year later. The proposed carbon tax will push household prices up further, although the federal government has promised to offset this for some households. Even with average household usage falling, demand is still rising at peak times in midsummer and midwinter, forcing upgrades to the power network.

The 5% cut in forecast demand is expected to push the need for new power stations back to 2020. No baseload power stations, which operate 24 hours a day, have been built in NSW since the 1980s, although gas-fired power stations have been built. The government is examining measures such as cutting the reliability of the network, which would leave households more exposed to blackouts.

Wednesday, 24 August 2011

NOT long ago Bacchus Marsh was a country town notable for two things: its Avenue of Honour elm trees honouring World War I soldiers and the produce from its market gardens.

It is now at the heart of a population growth corridor between Melbourne and Ballarat, and home to a growing number of commuters. This week some landowners learnt they could have anew neighbour: an opencut coal mine. Mantle Mining, which has a brown coal exploration licence to the town's south-east, told the stock exchange a drilling plan had been approved and it expected to set up rigs this month.

The company had advertised its plans locally as required, but harness racing stable owner Kate Tubbs says many were unaware until a public meeting on Monday. "I don't think there was one person that was in favour of coal mining", she says from her property five kilometres from Bacchus Marsh. "I think the company came expecting acceptance, but we had more than 60 people there and they were worried. Some were angry".

The concerned include 81-year-old Bruce McDonald, whose family has farmed at Parwan all his life. Like Mrs Tubbs, he has been told the company wants to drill on his land. "I don't think I can stop them really", he says. "In my opinion it is just too close to Bacchus Marsh for a coal mine".

Conflict between farmers and resources companies in New South Wales and Queensland have centred on coal seam gas projects. Federal Opposition Leader Tony Abbott backed the farmers, saying: "If you don't want something to happen on your land, you ought to have a right to say no".

In Victoria, there has been a lesser focus on proposals for a brown coal export industry. Mantle Mining aims to develop an open-cut mine near the existing Maddingley Mine, where a small amount of coal is extracted to make fertiliser. It says new drying technology can reduce the greenhouse gas emissions from burning coal by 40%, opening up a lucrative export market to India. Its export plan hit a snag last month when it withdrew an application to explore for coal at Deans Marsh following strong local opposition.

Opponents say new coal mine proposals threaten farmland and are at odds with tackling climate change. Mantle responds that China and India will continue to use coal and helping them lower emissions makes sense. The Baillieu government supports the development of new brown coal industries, but only a fraction of exploration licences evolve into full mining licences.

Mantle Mining managing director Ian Kraemer told Parwan residents that most exploration would be on roadside sites, but the company had the right to drill on private land if the owner was compensated. He also indicated that, unlike at Deans Marsh, he planned to proceed with an application for a full mining licence despite local opposition if it proved economically viable.

With major consumer incentives set to expire, the Victorian government is coming under pressure to reveal how it will support the state's solar industry. The previous Labor government started a policy whereby small businesses and households that install solar panels gain a premium tariff from power companies for electricity they feed into the grid over and above power used in their premises. However, the premium rate covers only the first 100 MWs of capacity installed in the state. Energy Minister Michael O'Brien says the cap for installed capacity under the premium feed-in tariff is likely to be met in late 2011.

The Victorian Competition and Efficiency Commission report on tariff arrangements is expected in 2012. Solar Shop is Australia's biggest photo-voltaic solar panel provider and its chief executive Tony Thornton says the government needs to explain an interim policy plan urgently before the expiration of the cap as the solar industry was in trouble around the country. The view of Clean Energy Council policy director Russell Marsh is that a higher rate of 40 cents was probably needed, while Greens MP Greg Barker called on Mr O'Brien to release more information over the cost of the incentive package. Lily D'Ambrosio, the opposition energy spokeswoman, says the government has to end uncertainty in the industry.